Palace Amusement obtains interim financing to stay afloat

Palace Amusement obtains interim financing to stay afloat

Preparing to resume operations with conditional reopening of cinemas

BY DURRANT PATE
Observer business writer

Friday, July 03, 2020

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Jamaica's lone cinema operator, Palace Amusement Company Ltd, has obtained interim financing from its bankers to keep the business afloat, having closed all its cinemas on March 14 in observance of social distancing restrictions by the Government to control the spread of COVID-19.

The closure of the cinemas has resulted in significant losses over the last three and a half months, forcing the company to seek interim financing to deal with its “substantial standing charges to maintain”.

The Jamaica Observer understands that the interim financing doesn't cover all of the company's financial obligations but is sufficient to meet its fixed costs.

In an advisory to the Jamaica Stock Exchange (JSE), Palace Amusement did not state the value of the interim financing or identify the source but admitted that COVID-19 has had a significant impact on its operations and performance. Estimates suggest that Palace Amusement could have lost as much as $300 million since the closure.

All cinema staff, totalling almost 300 people, have since been laid off. However, Palace reports that it has been training its staff accordingly and is putting the company in a position to be fully compliant when it reopens. The company says it will be bringing back as many of its cinema staff as possible once it is able to commence operations.

The cinema company reports that it has still not taken a decision regarding setting up a drive-in cinema.

In its advisory to the JSE, Palace Amusement states, “though efforts have commenced to explore the possibility of offering a drive-in cinema experience to our patrons, to date we are not in a position to say whether this will become a reality. Indeed, there has been no decision by senior management or the board of directors in this regard.”

Since cinemas have been closed, there has been renewed interest in bringing back drive-in spaces but Palace Amusement explains that such a venture would be costly at this time when the company has not been earning any income over the past three and a half months.

With the Government's announcement on Wednesday of conditional reopening of cinemas, playhouses, and theatres for 14 days effective Sunday, July 5, Palace Amusement is pushing to get its house in order and has already put in place the required health and safety protocols.

The wearing of masks would be mandatory while sanitisation stations are being erected throughout the cinemas. The company has proposed to take out every other row of seats which would result in a 50 per cent seating capacity, much better than the Government-stipulated 60 per cent seating capacity.

Palace Amusement has indicated that every party of patrons (people from the same household) will be seated together, and between them and the next party will be a two-seat margin, which would comply with the Government's stipulated maximum. The stipulation is that four people from the same family or group are permitted to be seated side by side with a gap of two seat spaces between each group and between individual patrons.

After each showing, Palace Amusement plans to sanitise the seats that were occupied.


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